Today at midday, the Bank of England will announce its latest decision about the base rate. For most people, the most important thing about the base rate is the impact it has on interest rates – on their mortgage and/or their savings.

Looking at the base rate, The Telegraph`s personal finance editor Ian Cowie wrote a blog called `Why you should pay down debt even if bank rate remains frozen`.

It starts by reporting that a poll by Reuters found that 61 economists said the Bank should keep the base rate at 0.5% today.

For savers, this wouldn`t be good news. Today`s low interest rates mean most savers are actually losing money in real terms, thanks to inflation (currently at 3.4% or 5.1%, depending on which figure you use – CPI or RPI).

For a lot of mortgage holders, though, it would be very welcome news. For many people with variable-rate mortgages, the record-low base rate means that clearing their mortgage debt is costing hundreds of pounds less every month. And people looking for a new mortgage deal could well find a deal that`s cheaper than the one they were on. So there`s plenty of opportunity to overpay those mortgages – to pay more than they`re required to on a monthly basis.

As Mr Cowie puts it: “But savers who also have a mortgage – or any other form of outstanding credit – have a simple means of obtaining a healthy risk-free, tax-free return by discovering the joy of early debt repayment.”

Paying off a debt early, he says, “avoids future interest costs and makes compounding work in your favour.”

He gives an example: a typical 25-year, 100,000 Standard Variable Rate (SVR) mortgage, with an interest rate of 3.5%.

If the mortgage holder can afford an extra 100 per month, they`ll clear the debt entirely almost six years before they expected to. In the process, they`ll save over 13,000 in interest.

If they can afford an extra 200 per month, they`ll clear the debt nearly 10 years earlier than expected, and save over 20,000 in interest!

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